Interest rates set to rise on Election Day for the first time in 18 years Business

The last time an MPC rate hike coincided with a poll was in local elections in June 2004, in which the ruling Labor party fared poorly.

It comes after the Metropolitan Police delayed releasing details of its ‘partygate’ findings until after the vote, and Transport Secretary Grant Shapps accused Sadiq Khan, the Mayor of London, of breaking the rules elections after revealing the opening date of Crossrail on Wednesday.

The nine-member panel meets eight times a year, and the Thursday meeting has been scheduled since late 2020. MPC meetings, which always take place on Thursdays, have often clashed with elections in recent years.

Markets expect officials to hold on to further rate hikes for the rest of this year, taking the Bank Rate to 2.25% by the end of the year, but economists say Increases are expected to slow after today.

Samuel Tombs of Pantheon Macroeconomics said that “the Bank’s medium-term inflation forecast will indicate that market expectations for rates are far too high.”

He said: “Expect the Committee to double down on its view that future tightening should only be ‘modest’.”

There could also be talk of the start of active sales of the Bank’s huge gilt holdings, which hit a record £875bn earlier this year following large-scale quantitative easing. during the pandemic.

Berenberg’s Kallum Pickering said: “In the event that the BoE starts active gilt selling, it should start very gradually – probably at a rate of no more than £1bn a week – so that policymakers have the opportunity to assess the impact on the market and adjust the pace afterwards if necessary.

The MPC voted 8-1 to raise rates at its last meeting in March, with Deputy Governor Sir Jon Cunliffe warning that the rate hike could weigh more on households.

Any further dissent in favor of keeping rates steady will likely be interpreted as dovish by markets and could put further pressure on the pound, which has weakened recently as nervous investors lean towards the dollar.